The United States Supreme Court decided to apply a stricter four-factor test when deciding whether a preliminary injunction requested by the National Labor Relations Board (NLRB) against Starbucks should be approved. A Congressional resolution disapproving the Fair Labor Standards Act (FLSA) overtime regulations issued by the Department of Labor. United States District Courts issued conflicting decisions denying and granting a request by state governments for a preliminary injunction blocking the regulations issued by the Equal Employment Opportunity Commission implementing the Pregnant Workers” Fairness Act. Federal contractors need to certify to the Office of Federal Contract Compliance (OFCCP) that they comply with the affirmative action program requirements by July 1^st.

Supreme Court Requires Tougher Test for Preliminary Injunction – The United States Supreme Court issued a decision requiring that courts use a traditional four-factor test when deciding whether to issue a preliminary injunction applied for under Section 10(j) of the National Labor Relations Act (NLRA). Justice Thomas, who wrote the majority opinion in the case of Starbucks v. McKinney, Regional Director of Region 15 of the National Labor Relations Board concluded that the four-factor test “requires a plaintiff to make a clear showing that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” The Supreme Court rejected a less rigorous two-factor test that had been applied in this case by the United States Court of Appeals for the Sixth Circuit when it approved the preliminary injunction.

Six employees at a Starbucks location in Memphis, Tennessee announced plans to unionize the store and several employees including the organizing committee invited a news crew from a local television station to visit the store after hours to promote the unionization effort. Store management investigated the incident and fired multiple employees including members of the organizing committee since it believed that the media event violated company policy. The union coordinating with the employees filed charges with the NLRB alleging unlawful interference with the right to unionize and discrimination against union supporters. The NLRB issued a complaint against Starbucks and filed a petition under Section 10(j) of the NLRA seeking a preliminary injunction requiring the reinstatement of the fired employees.

Section 10(j) of the NLRA gives the NLRB the authority to seek a preliminary injunction while the proceedings, which can take multiple years, are considered. This section states that a district court may “grant to the Board such temporary relief as it deems just and proper.” The District Court granted the preliminary injunction and the US Court of Appeals for the Sixth Circuit affirmed. The Sixth Circuit has adopted a two-factor test that looked at “whether there is reasonable cause to believe unfair labor practices have occurred and whether injunctive relief is just and proper.” The Supreme Court agreed to review the case due to a split among the judicial circuits as to the proper test that should be applied when considering a preliminary injunction petition under Section 10(j). The Supreme Court believed the four-factor test was the proper one for courts to apply when considering Section 10(j) petitions. The Supreme Court believed “it is hard to imagine how the Board could lose under the reasonable-cause test if courts deferentially ask only whether the Board offered a minimally plausible legal theory, while ignoring conflicting law or facts.”

Bill to Block Overtime Rule Introduced – Congressional Republicans have introduced resolutions (H.J. Res 166, S.J. Res 97) disapproving the rule enacted by the Department of Labor (DOL) concerning overtime under the Fair Labor Standards Act (FLSA) for executive, administrative and professional employees. The resolution provides that the rule would have no force or effect. It needs to be passed by both the House of Representatives and the Senate, and if this occurs,  President Biden is expected to veto the resolution. The resolutions have been referred to the House Committee on Education and the Workforce and the Senate Committee on Health, Education, Labor, and Pensions.

The rule would increase the salary basis threshold in two steps effective July 1, 2024, to $844/week or $43,888 per year and to $1,128/week or $58,656 per year effective January 1, 2025. The current salary basis threshold is $684/week or $35,568/year. The rule also provides for adjustments to the salary basis threshold every three years starting on July 1, 2027. Business groups have filed a lawsuit seeking to enjoin the FLSA overtime rule.

There are three lawsuits challenging the rule that have been filed in United States District Courts in Texas. The two cases that are pending in the United States District Court for the Eastern District of Texas are Plano Chamber of Commerce v. U.S. Department of Labor and State of Texas v. U.S. Department of Labor. These cases may be consolidated, and a hearing will be held on June 24^th on a motion for an injunction to prevent implementation of the rule. A third case, Flint Avenue LLC v. U.S. Department of Labor has been filed in the United States District Court for the Northern District of Texas. This case was brought by a small software development company that would have five of its seven employees no longer exempt if the new rule took effect on July 1^st. Also pending before the United States Court of Appeals for the Fifth Circuit is a case, Mayfield v. US Department of Labor, which raises the issue as to whether the DOL has statutory authority to impose a salary basis threshold to qualify for overtime exemption. A United States District Court granted summary judgment to the DOL.

Courts Issue Conflicting Decisions in Challenges to PWFA Rule Issued by EEOC – The US District Court for the Eastern District of Arkansas ruled that several state governments that were challenging a portion of the rule issued by the Equal Employment Opportunity Commission (EEOC) implementing the Pregnant Workers' Fairness Act (PWFA) lacked standing to obtain a preliminary injunction. The District Court, in the case of State of Tennessee v. Equal Employment Opportunity Commission concluded that the states failed to demonstrate either sovereign harms arising from their ability to regulate abortions and their interests in maintaining a pro-life message or economic harms based on compliance costs associated with the rule, since “neither presents a clear and present need for equitable relief.”

By contrast, the United States District Court for the Western District of Louisiana issued a preliminary injunction to the States of Louisiana and Mississippi and the United States Conference of Catholic Bishops that blocks the EEOC’s regulations implementing the PWFA. The District Court, in the case of State of Louisiana v. Equal Employment Opportunity Commission believed that the state plaintiffs had standing since they had demonstrated harm due to the “regulatory burden, increased costs to implement the abortion accommodation mandate, and damage to their sovereignty…”

The State of Tennessee along with 16 state governments brought this action challenging only that portion of the EEOC regulation concerning what the states refer to as elective abortion that might be obtained by state employees.  The District Court declared that the states were seeking a preliminary injunction “based on their challenge to one potential application of one part of the final rule's comprehensive regulatory architecture for implementing the Pregnant Workers Fairness Act's accommodation and anti-retaliation mandates.” The District Court found that the states had not made a “compelling case for issuing a nationwide injunction of the entire EEOC regulation” since the case “presents a narrow disagreement over a few words, a disagreement that seems unlikely to flower into few, if any, real-world disputes, especially given the undisputed reach of the new Act and the unchallenged portions of the implementing regulation.”

The District Court in the case brought by the States of Louisiana and Mississippi reviewed the legislative history for the PWFA and found that it “unambiguously confirms that Congress did not intend for the PWFA to require employers to accommodate abortion.” The District Court concluded that the plaintiffs were likely to succeed on the merits of the case since the EEOC’s interpretation of the statute exceeded the “agency’s Congressional authorization.”

OFCCP Contractor Compliance Certification Due by July 1^st – The Office of Federal Contract Compliance Programs (OFCCP) issued a reminder to federal contractors that they must certify their compliance with affirmative action program requirements by the July 1^st deadline. Covered federal contractors and subcontractors must use the contractor portal to certify annually whether they have developed and maintained an affirmative action program for each required establishment and/or function/business unit. New contractors have 120 days to develop an affirmative action program and then need to register and certify compliance.

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues and was an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.